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Under the direction of Tyler Cassity, the Hollywood Forever cemetery in Los Angeles – the burial place of film stars like Rudolph Valentino and Douglas Fairbanks – has become a popular venue for dance parties, concerts and fundraisers as well as funerals.

For more than a year, John A. Pérez, speaker of the California Assembly, dated a Hollywood funeral director who faces fraud allegations in one of the biggest financial scandals to rock the U.S. funeral industry.

During their relationship, Pérez, a Los Angeles Democrat, mixed political business with his personal life in ways that showed poor judgment, ethics experts say. A Pérez spokesman said the lawmaker conducted himself appropriately during a casual dating relationship.

Tyler Cassity, proprietor of a boutique cemetery called Hollywood Forever and defendant in a $600 million fraud lawsuit in his native Missouri, accompanied Pérez to a series of high-profile public events.

In July 2011, the powerful state official brought Cassity to an exclusive Los Angeles party to honor Britain’s Prince William and his wife, Catherine, documents show. In December 2011, Pérez took Cassity on a weeklong lawmakers’ junket to Israel, where they met President Shimon Peres and other Israeli officials.

In 2012, Pérez persuaded Sacramento political donors to contribute thousands of dollars to AIDS/LifeCycle, a charity Cassity favors, according to state records. Also last year, Pérez accepted a $1,000 political donation from the funeral director.

Meanwhile, in St. Louis, Cassity, his parents and his older brother are defendants in a 2009 lawsuit that contends they looted millions of dollars from trust accounts and insurance policies that were supposed to be set aside to pay for customers’ funerals.

The suit was filed by a receiver appointed to oversee the Cassity family’s National Prearranged Services Inc. and related businesses after they became insolvent.

In terms of financial losses, the collapse of the Cassity companies may represent “the biggest scam” ever in the U.S. funeral industry, said Joshua Slocum, executive director of the Funeral Consumers Alliance reform group.

In 2010, Cassity’s father and brother were indicted on fraud charges in the scandal. In July, they pleaded guilty to felony charges.

Cassity himself was not charged with any crimes. However, the receiver’s lawsuit contends that he committed racketeering and fraud, saying he helped direct improper fund transfers and intercompany loans at the heart of the looting scheme. Cassity and companies he headed got millions of dollars that should have been set aside for customers’ funerals, the suit says.

In the indictment of Cassity’s father and brother, federal prosecutors claimed that both Hollywood Forever and Cassity’s Fernwood cemetery in Mill Valley, were operated with illegally obtained funds.

Cassity is fighting the lawsuit, denying in legal filings that he did anything wrong. His lawyer declined to comment for this story. Cassity didn’t respond to interview requests.

Pérez became aware “that there was this investigation” of Cassity at some point after they began dating, said John Vigna, the speaker’s spokesman. He said the lawmaker didn’t seek details about what he regarded as allegations “in another state concerning Mr. Cassity and his family and their business” that eventually would be sorted out in the courts. Pérez has seen little of Cassity in the past 18 months, the spokesman said.

Hanson cited the $1,000 political donation as evidence of questionable judgment. It’s unwise, he said, for a politician to take donations from someone being sued for financial fraud because of questions about the source of the funds. It’s also a mistake to introduce a person facing fraud allegations to foreign dignitaries, Hanson added, saying that can expose the officials to embarrassment.

Vigna, Pérez’s spokesman, said the foreign governments didn’t ask for background information about Cassity and Pérez didn’t provide it. Both the Israel trip and the party for the British prince were “meet-and-greets” rather than “events of state” where a participant’s background might be relevant, he said. The spokesman also noted that Cassity has donated to other politicians besides the speaker.

Pérez, 44, is a former labor union official who was elected to the state Assembly from a downtown Los Angeles district in 2008. The following year, he was named speaker – the first openly gay lawmaker to hold the post. Facing term limits next year, he is considering running for another statewide office.

Cassity, 43, went to college in New York, where he was active in the gay rights movement. He has worked as an executive in the family funeral business his entire adult life, records show.

In 1998, with his brother, Cassity bought the old Hollywood Memorial Park cemetery near Paramount Studios, burial place of Rudolph Valentino, Douglas Fairbanks and other film stars.

He renamed it Hollywood Forever and spent millions on renovations to make it a “proud, revitalized cultural landmark,” as he told the judge in the lawsuit filed by the receiver.

Under his direction, Hollywood Forever became a popular venue for dance parties, concerts and fundraisers well as funerals, and Cassity became a local celebrity. Last month, an outdoor screening of the final episode of the television series “Breaking Bad” drew thousands of fans.

In 2004, Cassity bought the Fernwood cemetery in Marin County and promoted it as a venue for “eco burials.”

In an HBO documentary, a New Yorker magazine profile and other news accounts, he has been portrayed as a funeral industry entrepreneur whose innovations have made him millions. But the receiver’s lawsuit claims that both California cemeteries were subsidized with illegally obtained funds. More than $1 million in customers’ funds was spent to pay off Cassity’s personal credit card, the suit also says.

Pérez and Cassity began dating in 2011 and drew apart in 2012. The lawsuit was underway while they were seeing each other.

Both men have an interest in Los Angeles politics. Since 1999, Cassity and his companies have donated $38,000 to Democratic candidates and causes, records show. Cassity also set up his own political action committee, the Hollywood Restoration PAC. The PAC received $400,000 in donations from a Cassity family investment company named in the lawsuit as having received funds skimmed from customers’ funeral accounts.

At times, the social relationship between the politician and the politically active funeral director also involved money and politics.

In May 2012, the speaker helped make Cassity the top fundraiser for AIDS/LifeCycle’s Ride to End AIDS, a San Francisco-to-Los Angeles bicycle tour to raise money to fight the disease.

Pérez reached out to his Sacramento contacts, asking them to sponsor Cassity in the ride, his spokesman said. An itemized donor list on the AIDS/LifeCycle website shows that Cassity raised more than $53,000. Of that money, more than $33,000 came from lawmakers, lobbyists and Sacramento political contributors with ties to the speaker.

Fourteen state lawmakers donated, led by Pérez. Six donors were lobbyists, including two former Assembly speakers, Fabian Núñez and Robert Hertzberg. Seven have worked for either Pérez’s legislative office or his political operation.

Cassity’s biggest donations came from three corporate donors that often lobby the Legislature. Two Indian tribes that operate casinos in Southern California gave $5,000 apiece. Anthem Blue Cross, a health insurer that lobbies on a wide range of health care issues, also gave $5,000.

State law requires politicians to file a special report when they arrange a contribution of $5,000 or more for a charity. Pérez reported the tribes’ donations for Cassity. His spokesman said Pérez wasn’t involved in arranging the Anthem Blue Cross donation and thus didn’t report it.

A spokesman for Anthem Blue Cross acknowledged the $5,000 donation for Cassity. In an email, the spokesman said he was trying to learn how Cassity came to the company’s attention. But after that, he stopped returning calls.

This story was edited by Amy Pyle and copy edited by Nikki Frick and Christine Lee.

The independent, nonprofit Center for Investigative Reporting is the country’s largest investigative reporting team. For more, visit www.cironline.org. The reporter can be reached at lwilliams@cironline.org.